Draft Strategy and Policy Statement for Energy Policy in Great Britain

Alan Brown Excerpts

Tuesday 19th March 2024 General Committees

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I beg to move,

That the Committee has considered the draft Strategy and Policy Statement for Energy Policy in Great Britain.

The past few years have brought unprecedented changes and uncertainty to Great Britain’s energy system, but we have remained resilient. Last year, we laid the foundations for an energy system fit for the future with the landmark Energy Act 2023, the largest piece of energy legislation in the United Kingdom in a generation, which is world-leading in legally mandating net zero. The changes in that Act, including the powers to establish a National Energy System Operator—NESO—and new duties for Ofgem, mean that now is the right time to reaffirm the Government’s strategic priorities and policy outcomes in this strategy and policy statement.

The Strategy and Policy Statement for Energy Policy in Great Britain is developed according to part of the Energy Act 2013. The SPS sets out in clear terms the Government’s strategic priorities and other main considerations for energy policy, the policy outcomes to be achieved, and the roles and responsibilities of persons involved in implementing that policy. The Secretary of State, Ofgem and the National Energy System Operator —a new independent public corporation responsible for planning Britain’s electricity and gas networks and operating the electricity system—will be required to have regard to the strategic priorities set out in the SPS.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Can the Minister give us a timescale for when NESO will be operational as an independent body, in the way envisaged by the Government?

[Amanda Solloway]

I will come on to that in a moment.

The Secretary of State and Ofgem must also have regard for the policy outcomes contained within the SPS, and both parties must carry out their respective regulatory functions in the manner which they consider best calculated to further the delivery of the policy outcomes.

NESO is expected to be established this year. The SPS serves an additional purpose of setting out and clarifying the roles and responsibilities of NESO alongside Ofgem and the Government. The SPS is intended to provide guidance to the energy sector on the actions and decisions that are needed to deliver the Government’s policy goals, and places emphasis on where the Government expect a shift in the energy industry’s strategic direction.

As the independent energy regulator for Great Britain, Ofgem cannot be directed by the Government on how it should make decisions. Similarly, NESO is being set out to be operationally independent and free from day-to-day Government control. However, the SPS will provide guiding principles for Ofgem and NESO when it is established. The strategic priorities and policy outcomes within the SPS do not include the creation of any new policies or duties.

[Amanda Solloway]

Absolutely. That is the very reason we are doing this—to make sure that we achieve our net zero targets.

The statement will support strategic alignment between the Government, Ofgem, NESO and the industry, by making clear what the Government want to achieve in the energy sector. The legal framework of the Energy Act 2013 requires that Ofgem, NESO and the Secretary of State all have a duty to have regard to the strategic priorities within the SPS.

Ofgem must publish a strategy showing how it will further deliver the policy outcomes and its annual report must assess its contribution to deliver those outcomes. The SPS also acts as a tool to promote alignment between Government, Ofgem, NESO and industry. As per the Energy Act 2013, the SPS has completed two consultations. The first was undertaken with Ofgem and the Welsh and Scottish Governments, and the Government worked with all parties to make sure views were correctly captured before moving on to the second public consultation, which was held last summer.

[Alan Brown]

I refer the Minister to the 16th report of the Secondary Legislation Scrutiny Committee, which was published earlier this month on 7 March. It details the fact that there was consultation with Scottish and Welsh Ministers, as the Minister said. However, additional information provided by her Department makes it clear that the Welsh Government asked for the Welsh net zero targets to be included in the SPS, and that the Scottish Government asked for the same for the Scottish net zero targets and also for the networks section to be strengthened. According to her Department, information was added to the introduction for the Welsh and Scottish net zero targets, but I cannot find it in the introduction. I wonder if the Minister could provide clarity on where that was included in the documents.

[Amanda Solloway]

I will have a look at that information and see if we can get that to the hon. Member if it is not included.

The feedback throughout both consultations was generally positive, and stakeholders were keen to see the SPS implemented to give guidance to the sector on the roles of Ofgem, NESO and the Secretary of State in delivering the Government’s priorities for the energy sector. Since the consultation was concluded, officials have worked through feedback and, where appropriate, used that to inform the current iteration of the SPS before us. The Government are confident that this SPS reflects the right strategic priorities and policy outcomes for energy policy for the whole of Great Britain. The SPS reaffirms the Government’s commitments and priorities for the energy sector and, in doing so, acts as a tool to support strategic alignment between Government, Ofgem, NESO and industry. I commend this draft statutory statement to the Committee.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The power to designate a strategy and policy statement, as the Minister has set out, has been in place since the passing of the Energy Act 2013. That Act envisaged, among other things, that a strategy and policy statement would be an essential tool in aligning the actions of Government and of Government agencies and bodies, such as Ofgem, and ensuring that they were marching in lockstep as far as the development of strategic priorities was concerned. Indeed, this strategy and policy statement is very important in making sure that, with the designation of a net zero mandate for Ofgem, which took place in the recent Energy Act 2023, the alignment is complete with the issue of the strategy and policy statement. However, I point out that these strategy and policy statements are supposed to last for five years and to be reviewed at the end of a five-year period—or, significantly, should an election take place in the meantime.

The strategy and policy statement power, therefore, has not been used since the introduction of the 2013 Act. We should have had one almost immediately after the Act, and we should be revising the second one now. The fact that one is not in place is a theme of this Government because we other publications have been long delayed, including a new national policy statement for energy and a national policy statement for nuclear.

The document necessarily acts at a very high level, and there is a lot that we agree with, particularly the strategic overview and priority that has been put forward with this policy statement. As I have mentioned, having an SPS is a great improvement on not having one in this area. However, it is clear that the document will not stand for five years, which is the time at which the legislation says it should be reviewed. For one, there is an election coming this year. While there are several points of substance on which Labour plans would differ from the Government’s, the most important is our commitment to clean power by 2030, which is a clear differentiation from the strategic view set out in the document. Certainly, should there be an election shortly and should Labour be fortunate enough to win, we will revise the policy statement at a very early stage in the next Labour Government.

[Alan Brown]

If Labour gets in and if the policy document is revised, how will it be funded to get to zero carbon by 2030? Surely, that was a key component of the £28 billion a year pledge, which has now been scrapped. The two are surely incompatible now.

[Dr Whitehead]

I am tempted by the hon. Member to go down the lengthy path of discussing how the move to clean power by 2030 will be financed. I can assure him that that is fully set out and sorted out as far as Labour policy statements are concerned. However, he makes the important point that a number of things that Government have done recently run against not only the idea of clean power by 2030 but their own strategy and policy statement as it is now being put forward —for example, putting back the mandate for the end of the sale of internal combustion engine vehicles to 2035 when it was originally 2030.

Regardless of the results of an election, I do not think the document can stand for five years because it leaves so much undefined. The Minister has mentioned the issue of the National Energy System Operator and its relationship to Ofgem, but that is completely undefined in the document because that has not yet been worked out. NESO itself is not yet established and, indeed, the strategy and policy statement makes frequent reference to unpublished interim steps, such as an interim strategic spatial energy plan, which we think is a good thing and long overdue. As NESO is established in the various plans that the SPS hints are in place, we need a much more substantive update to the policy statement, including what is to happen on the question of regional energy system planners, which the document mentions but does not discuss further, as far as their operation and organisation are concerned.

Can the Minister tell us when she hopes to issue an update to the strategy and policy statement? Perhaps, when we are clearer about what the National Energy System Operator will actually do and how its relation to Ofgem will pan out, she will be able to say to the House that a revision of the strategy statement will be forthcoming and will put things into place in a much clearer way regarding the new arrangement for energy systems.

There are also one or two drafting errors in the statement that I will point out. Twice, the document refers to plans that are due for completion in 2023. We are now in 2024, and it is not that the plans have not been completed or addressed; it is just that the document is referring to, I assume, something that has not been updated in terms of where we are now. It would be a shame if the document went out with factually inaccurate material on dates.

There are other commitments for 2024, on which we are not convinced the Government are making sufficient progress and which are mentioned in the document as if they were. One example is developing a plan for long-duration energy storage. Indeed, other areas bear little relationship to reality; for example, the Government reaffirm their commitment to the 2030 fuel poverty target, but National Energy Action says that they will miss it by over 90%. The SPS also talks about the roll-out of smart meters, but as we all know, that too is well off-track. I would question the value of a strategic overview that does not take proper account of the real state of the policy landscape it is summarising.

This strategy and policy statement is clearly going to need to be revised in the near future. However, as I said, it is better than having no statement at all, and it provides for some useful new processes such as Ofgem reporting annually on how it is meeting the requirement to have regard to the Government’s strategic objectives. For that reason, and because of the fact that we finally have a strategic policy statement, we will not be voting against the measure this morning.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Ms Rees. The hon. Member for Bolsover has encouraged me to be brief, and I will see what I can do. There is such a good turnout on the Government Benches that I think they would want a proper debate on this. I apologise for how I will go through this; there are no paragraph numbers in the draft strategy and policy statement, which I find quite frustrating, as it means I am trying to make cross-references. Can I request that in the future there are paragraph numbers and references?

Starting with the fourth paragraph on page 7, the statement says that the Government

“expects private sector investment of around £100 billion in the energy sector in the period to 2030”.

It would be good to know what level of Government expenditure is expected. Do they intend to lever in that £100 billion? Also on page 7—the hon. Member for Southampton, Test mentioned this—the statement says that the Government

“plan to reflect how best to cover NESO in its substantive role once it is established.”

That basically confirms that this document does not set out proper duties for NESO because NESO still has to be up and running. In many ways, that suggests that this policy statement was too early. It would make sense to introduce it once NESO is established, so that its substantive role could be echoed throughout the document.

That brings us to the question of how this is going to work. NESO is going to be critical for helping to deliver energy strategy, but a paragraph on page 8 details the fact that the independent system operator and planner, meaning NESO, has a duty to notify the Secretary of State if, at any time,

“it thinks that a policy outcome in the SPS is not…achievable.”

What are the interim arrangements for the period until NESO is up and running if it is deemed that there are policies that are not achievable? As you know, Ms Rees, I am a glass-half-full type of guy, but there are policies in this document that I do not think are achievable.

The nuclear plan is never going to achieve a 24 GW deployment by 2050, and it is really unlikely that the planned deployment of 50 GW of offshore wind will happen. The emission reduction targets for 2030 are unlikely to be achieved, the sixth carbon budget is behind schedule, and the plan for 600,000 heat pump installations by 2038 ain’t gonna happen on the current trajectory. The planned energy efficiency upgrade of ensuring that all properties achieve a rating of band C by 2030 is not practical, and that is not going to happen, either. What interim arrangements can be flagged up to the Government, and will the Government then review those, respond and take action?

Page 11 says that

“Ofgem is…accountable to Parliament”.

That is true, but would the Minister explain how Ofgem is accountable to Parliament and whether that is set out anywhere? I was previously a member of the Business, Energy and Industrial Strategy Committee. It conducted an inquiry, and Ofgem gave evidence. It was kind of set that Ofgem was effectively accountable to the BEIS Committee, and that that was a parliamentary scrutiny process. That came as news to everyone on the Committee, and I am sure it would come as news to a lot of Members in Parliament. Having a clear process that sets out how Ofgem is accountable to Parliament would be useful to all Members across the House. Should there be something in the document about that, or should it be set out clearly somewhere else?

Page 11 confirms that it is now a duty for Ofgem

“to consider consumers’ interests in the Secretary of State’s compliance with the net zero targets”.

Going forward, it also confirms that Ofgem should

“have regard to the desirability of promoting economic growth when carrying out its core regulatory functions.”

It is quite possible that to balance consumer needs and economic growth means different decisions or recommendations. What should take precedence for Ofgem, and how will that work? What does that mean going forward? I have long said about the contracts for difference process that the Government have not put enough emphasis on local supply content and building up a UK-based supply chain. That would actually deliver economic growth, instead of CFD being based solely on the lowest price, which has offshored a lot of the manufacturing. Contracts for difference has been a missed opportunity. Going forward, it can still deliver economic growth, but is it going to be left for Ofgem to decide the options, or for the Government to decide the parameters?

Page 17 confirms the target of 600,000 heat pumps per year by 2028. Can the Minister explain what level of deployment we are getting at the moment, and what plans the Government have to get it up to 600,000 per year? Pages 23 to 25 detail nuclear policy, which is one of my favourite Government policies that exists. On page 24, we are told that nuclear is “providing reliable, safe electricity”. However, the reality is that each nuclear reactor is down on average for a quarter of the year. That has been every year for the past 10 years; I established that through parliamentary questions.

What does happen when nuclear is down for a quarter of the year and the sun is not shining and the wind is not blowing? That is the scenario that we are always told that nuclear is needed for. I wonder what back-up plans the Government have to deal with that.

I am going to be slightly facetious. There is a paragraph that talks about the

“approach to the delivery of new nuclear projects beyond Sizewell C, giving industry and investors the confidence necessary to deliver projects at pace”.

What is it that is happening now that will allow projects to be delivered at pace? We know that Hinkley Point C is years behind schedule. Sizewell C has taken years to even get to the final investment decision. Even if Sizewell C continues “at pace” during construction, it is going to be a further 10 to 15 years. Can we have a definition of what “at pace” means?

On the technology selection process for small modular reactors, can the Minister confirm that there is not a single approved design at the moment? They are only now approving the design. Therefore, even if the Government select a winner in the technology selection process, that winner still has to go through the approval process with the Office for Nuclear Regulation, which takes years. That will take us beyond the 2029 point.

There is a section on low-income, vulnerable and fuel-poor households. That talks about upgrading all homes in England to band C by 2030, “as reasonably practicable”. Can the Minster define what “as reasonably practicable” means, in terms of what is a reasonable cost or a reasonable level of disruption? That has got to be understood, because it will be a clear exemption that the Government will rely on, going forward. Given that after 14 years of Tory Government the number of properties in band C is sitting at 50%, that means the other 50% of properties have got to upgrade in the next six years. What are the Government doing to make it possible to do that?

If we are looking at low-income, vulnerable and fuel-poor households, a social energy tariff is not mentioned here. A consultation on a social energy tariff was supposed to be one of the Government’s pledges before, so what has actually happened? What is the thought process about a social energy tariff?

I welcome the fact that on page 32 it lists among the Government’s policy outcomes:

“By 2024, an appropriate policy to enable investment in large-scale long-duration electricity storage consistent with cost-effective decarbonisation.”

But clearly we are in 2024. I know that a consultation is ongoing about a framework carbon floor mechanism, but when will that be concluded and implemented? I have raised this several times, but we really need to get pumped storage hydro schemes on the go. I am thinking particularly of Coire Glas and the Cruachan Dam extension.

Finally—people will be glad to hear—the document finishes with the EU-UK trade and co-operation agreement. Energy UK has confirmed that as part of the current trade and co-operation agreement we are spending £1 billion extra a year on trading arrangements; that is added directly to our energy bills. When will the Government change or renegotiate that and save us £1 billion on our energy bills during this cost of living crisis?

I look forward to hearing the ministerial response.

--- Later in debate ---

[Amanda Solloway]

I thank all right hon. and hon. Members for what have been, in all cases, heartfelt contributions. I also thank them for their scrutiny of the draft of the document. Some of the issues in hand fall outside my portfolio but within the Department. If there is anything I am unable to answer in this speech, I will respond in more detail to right hon. and hon. Members in writing.

I am confident that the strategic prices and policy outcomes in the SPS clearly establish what the Government are trying to achieve in the sector and why that is important. It demonstrates how smaller policy outcomes contribute to broader priorities, so stakeholders can be reassured about how their role fits into the bigger picture. I also hope the SPS sets out a clear description of the roles, responsibilities and remit of Government, Ofgem and particularly NESO in delivering the objectives. We have tried to provide enough information on NESO’s remit to give confidence in its role when established, while also recognising that its responsibilities will evolve over time.

As well as reaffirming our ambitions, the SPS will give encouragement to Ofgem to utilise the full range of its powers to ensure that those ambitions are realised, and that stability and confidence are restored across the sector. I am pleased that most right hon. and hon. Members welcome the SPS. I want to go into further detail in response to some of the questions posed today.

The hon. Member for Kilmarnock and Loudoun asked when NESO would be operational. Our aim is for it to be operational later this year, depending on a few factors, including agreeing timelines with key parties. We continue to work closely with National Grid plc, National Gas and other stakeholders to enable efficient transition while maintaining the safety and ability of the operation of the energy systems.

In response to the hon. Member’s question on Scotland’s net zero targets, I should say that the SPS notes that Scotland and Wales have established their own net zero targets. Then, on a further point, Ofgem is established as a non-ministerial Government Department so, like other Government Departments, it is accountable to Parliament. I will write to the hon. Member if I have failed to address any other queries.

[Alan Brown]

I would just like a wee bit more detail on what “accountable to Parliament” really means and what that looks like overall, in terms of Ofgem and its responsibilities.

[Amanda Solloway]

The hon. Member will understand the parliamentary protocol around how regulatory bodies operate. Ofgem is set up as a Government body. On the scrutiny, he will know that a Select Committee, for example, would be able to talk to Ofgem.

My right hon. Friend the Member for Chipping Barnet asked how the SPS will focus on the switch to renewables. The SPS is clear that driving a net zero transition by achieving Government targets for renewable and low-carbon deployment is a strategic priority for Government.

I turn to the questions from the hon. Member for Southampton, Test. NESO will take time to reach full maturity as a new organisation, so we have kept references to NESO at a high level in the SPS. NESO is being brought into existence and its roles are still in development, including spatial energy and regional system planning. We instead plan to reflect how best to cover NESO in its substantive role once it is established. The Government have the power to review and revise the SPS in preparation for or in connection with NESO’s designation and will therefore consider the future when it is appropriate to do so.

I thank my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) for our previous conversations on what I know is an important issue. The SPS does not create new policy, but reaffirms Government’s existing priorities and sets out the roles of Government, Ofgem and NESO in delivering them. It is Ofgem’s role as the independent regulator, and NESO’s role as an independent system operator and planner, to decide how to go about achieving strategic priorities contained within the SPS. Their approach should be balanced in line with their duties.

In total, we received 140 unique responses to the SPS public consultation. The document summarising the responses, which was laid in the House alongside the SPS, details how we responded to that feedback. The SPS was cleared by the Home Affairs Committee and the parliamentary business committee before it was laid in Parliament on 21 February, and it is not a national policy statement for energy. The national policy statement for energy was published on 22 November 2023 and came into force on 17 January 2024.

With regard to the strategic spatial energy plan, we believe NESO has a key role to play in strategic planning for the energy system. The expertise of an independent NESO will be invaluable in creating the SSEP, but it is important that the plan is underpinned by proper democratic accountability. It will be produced through close working between the UK Government, the ESO, NESO—once established—and Ofgem. We will set out the full and clear expectations on governance and arrangements for each stage of the process in our commission to NESO.

Ultimately, we anticipate that the SSEP will cover the whole energy system, land and sea, across Great Britain. However, producing a comprehensive, multi-vector plan that effectively meets our future energy needs will naturally take time to get right. We are therefore commissioning the ESO, ahead of becoming NESO, to produce the first iteration of the SSEP, covering infrastructure for electricity generation and storage, including relevant hydrogen assets. That will foster a more efficient electric system design, promoting anticipatory network investments to enable the reduction of the waiting times for generation and storage projects to connect to the grid.

We also recognise the importance of protecting our environment and will ensure that any decisions on scale and location of infrastructure consider possible effects on the environment. The SSEP will go through an onshore and offshore strategic environmental assessment or an equivalent assessment under the environment outcomes report system, once it is in force. We also intend the SSEP to carry out a plan-level habitats regulations assessment. Planning policy will continue to take full account of legislation to protect the environment and habitats. As I said earlier, I will write to my right hon. Friend on other points she has raised.

In response to my hon. Friend the Member for Kettering, given Ofgem’s new roles, legislated for in the Energy Act 2023, and the establishment of NESO, now is the right time to publish the SPS. The SPS will give further guidance to the energy sector and support strategic alignment between Government, Ofgem, NESO and industry by reaffirming our priorities and commitments. Ofgem and NESO have a statutory duty to have regard for strategic priorities set out in the SPS, which makes it different from previous Government strategies.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Strategy and Policy Statement for Energy Policy in Great Britain.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 27th February 2024 Commons Chamber

[Graham Stuart]

I can. What the sector does not need, of course, as OEUK has itself set out, is the tens of thousands of job losses that would be driven by the ideological and climate-damaging obsession of the right hon. Member for Doncaster North (Edward Miliband) with ending new UK oil and gas licensing.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

T7. The last published Government estimate for Sizewell C is £20 billion, but Hinkley Point C, the supposed prototype for Sizewell C, is now estimated to cost £48 billion. When will the Government admit that the actual cost of Sizewell C will be a colossal £50 billion noose around bill payers’ necks?

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

The SNP, blinded by a misplaced belief in its own exceptionalism, seems almost alone in the world in not recognising the benefits of new nuclear when it comes to meeting our net zero objectives, delivering our energy security and improving our baseload. At last year’s COP, 30 countries around the world came together to commit to increasing nuclear-generated capacity by 30%. It would be brilliant if Scotland could be part of that change, but the SNP and its luddite partners in the Green party are holding Scotland back. We are determined not to do that for the rest of the UK.

Civil Nuclear Road Map

Alan Brown Excerpts

Thursday 22nd February 2024 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I commend the hon. Member for Folkestone and Hythe (Damian Collins) for initiating the debate. It may not surprise him that I will approach it from a different angle, providing the opposition, as it were.

In my view, this should be called the nuclear road map fantasy. Even if we put aside my objection and that of my party to new nuclear power, all the evidence and all the understanding of the development or non-development of nuclear power in the UK over the past decade point to the fact that this will not happen. As the hon. Gentleman rightly pointed out, the 2011 plan never came to fruition. It is obvious that the nuclear ambitions have not been fulfilled in the past 13 years.

Every pro-nuclear enthusiast seems to ignore the fairly recent market failure whereby Hitachi walked away from Wylfa and Oldbury and Toshiba walked away from Moorside. Notwithstanding the intended competition for the construction of all these new nuclear sites, EDF and China General Nuclear remained the only show in town, and EDF is still the only show in town as the only company willing to build large-scale nuclear. EDF has a blank cheque when it is at the negotiating table, because there is nowhere else for the Government to go. Large-scale nuclear ambitions also ignore the fact that as a concept the EPR design has been a failure, with every single EPR project in the world being over budget, late and experiencing technical difficulties. Finland’s Olkiluoto 3 was 15 years late. Flamanville in France is 12 years late and at four times its original budget. Taishan in China was held up as the delivery exemplar when it was commissioned, but has been plagued by safety concerns owing to rod damage, and has been offline as much as it has been online since it was commissioned.

We were told that the lessons learned from all the problems with all the other EPR projects would be put into place in Hinkley and that it would be much more efficiently delivered, so let us look at Hinkley Point C. In 2016, its estimated cost was £18 billion, but EDF has recently updated that estimate to £48 billion in today’s prices—a mere £30 billion overspend. Instead of generating power in 2025, it will now be as late as 2031. As costs have continued to spiral, the Government’s attitude remains that it does not really matter for the taxpayer, because all the risk sits with EDF.

However, China General Nuclear, which is a partner in the project, has already reached its cap on the money and capital it is willing to put in, so clearly EDF is now having to find a lot more borrowing than it anticipated. Frankly, it beggars belief that the Minister and the Government claim not to be speaking to EDF about this, especially when just last week the chief executive of EDF, Luc Rémont, stated:

“We’re confident we can find a pathway with British authorities on Hinkley Point C and Sizewell.”

When will the Government admit that Hinkley Point C will need some sort of bailout to allow it to get to completion, or is the intention to throw more money at Sizewell to offset Hinkley’s financial black hole for EDF? The Government also need to come clean on why they put back the contractual payment cut-off dates for Hinkley by six years. Do they know that there is potentially further bad news for Hinkley?

The lessons learned have not worked out for Hinkley, but now we are told that it has been a good learning project and that Sizewell C will be different and will be delivered efficiently, learning from the lessons of the delivery of Hinkley. Again, this is head-in-the-sand stuff. The last Government estimate for Sizewell C was £20 billion, but we now know that Hinkley will cost nearly £50 billion, so it is quite clear that Sizewell C will cost £50 billion—a lot more capital than the Government have intimated they are required to raise. It is no wonder that pension funds have been running a mile from investing in Sizewell C.

[Dr Coffey]

It is not a straightforward comparison, because I think Sizewell C is still in line with its 2015 prices. It is fairly standard to try to stick with an estimate, but I agree with the hon. Gentleman. As the local MP for Sizewell C, I am concerned that there have been significant delays at Hinkley. I appreciate that the SNP does not approve of nuclear power at all, but I would like to understand why he is concerned that the Government will have to bail out Hinkley C, when that is clearly not the situation. I would be interested to explore why he thinks that is the case.

[Alan Brown]

I quoted the chief executive of EDF, who says he hopes to find a pathway with the British authorities, which suggests that EDF wants to be talking about getting more money. The reality is that if there is a £30 billion overspend, EDF must recover that money somewhere, if it can afford to deliver the project without getting a bailout and in line with the 35-year contract it has for selling electricity. If the company has been able to swallow that level of overspend, it shows that the site rate originally agreed in the £18 billion estimate for construction was way too high, because the original £18 billion was supposed to cover contingency as well. Something does not stack up, given that there is such an overspend and such a delay. The delay means that it will be even longer before EDF starts getting payment for the project, so something is not quite right and we need to get a better understanding of that.

I disagree that Sizewell C is still in line with its 2015 prices. At the end of the day, although some lessons can be learned and replicated, the site for Sizewell C is smaller, more constrained and geologically different. It is surrounded by marshes and adjacent to an internationally renowned nature reserve. It is also in one of the fastest-eroding coastlines in Europe, which is subject to rising sea levels and more extreme weather events. In other words, I would argue that Sizewell C is a daft location for a new nuclear power station. With the groundwork and initial civil engineering that will be required, it is not a straightforward carbon copy of Hinkley. We need to know the official estimate for Sizewell C. Taxpayers deserve some transparency, especially given that the Government have already allocated £2.5 billion of taxpayers’ money to EDF for the development of the project, just to get to the stage of a final investment decision. Enough money has already been ploughed into Sizewell C, yet there is still a lot of uncertainty.

On the wider programme delivery considerations for these large-scale nuclear sites, Hinkley will have taken 15 years to complete, if it is completed, by 2031. Even if we are optimistic about Sizewell C, which will be delivered much more quickly, it is still going to take at least 10 years, so it could be between 2035 and 2040 before it is delivered. These timescales alone show the folly of relying on nuclear for decarbonisation and of planning for nuclear to deliver 25% of generation output capacity by 2050, as set out in the road map. It also shows the folly of the road map stating a delivery target of 3 GW to 7 GW every five years. It is a fantasy target, as is 24 GW overall, unfortunately.

The concept of 24 GW, or 25% of generation output, is the wrong model, given that nuclear power is so inflexible. Such a large nuclear output on the grid means that, at times, even greater constraint payments will be paid for renewable energy companies to turn off their turbines.

Large-scale nuclear cannot deliver the intended five-year targets, so how will those targets be met? As the hon. Member for Folkestone and Hythe (Damian Collins) outlined, the road map talks about small modular reactors. The name sounds innocuous, but do people really believe that a footprint the size of two football pitches is small? It clearly is not, and there is not yet a single licensed prototype in the UK. Good luck in the competition for SMRs, considering that none has been licensed and approved for construction in the UK.

Of the designs that the Office for Nuclear Regulation is considering, the only one to have reached stage 2 is the Rolls-Royce proposal, with the ONR’s stage 2 assessments due to conclude in July 2024. Stage 3 timescales are still to be confirmed, so the reality is that SMRs are just a glint in the UK’s eye at the moment. There is no understanding or certainty on timescales, even if SMRs do come to fruition.

NuScale is supposedly the world leader in SMR technology, and it has just given up on its proposed SMR in Utah because costs have ballooned to £7 billion. The cost of electricity generation has rocketed, too. Our road map tells us that the UK will pioneer and lead the way on new nuclear and SMRs, but that does not make sense. The Government estimate that SMRs will cost £2 billion a go, which makes no sense given the cost of the project in Utah. The Chair of the Environmental Audit Committee, the right hon. Member for Ludlow (Philip Dunne), is in his place, and I welcome the questions he has put to the Government. The Government need to consider this closely, and I look forward to their response.

Why does the road map outline two possible funding models—contracts for difference and a regulated asset base? At a £92.50 per megawatt-hour strike rate over 35 years, Hinkley Point is way more expensive than renewable energy at circa £40 to £50 per megawatt-hour over just a 15-year concession period. When we debated the legislation on the regulated asset base funding model, the Government told us that the CFD model does not work for nuclear as it is too expensive, and that switching to RAB would save £40 billion to £80 billion over the lifetime of a nuclear project. If that is the case, why are two funding models listed in the road map? Are the Government now concerned that RAB transfers too much risk to the bill payer? Are they concerned about repeating what happened in South Carolina where, under a regulated asset base model, a company abandoned the construction of a nuclear power station and ratepayers were left paying for a power station that was never completed? What is to stop that happening at Sizewell?

The road map outlines the need for a geological disposal facility, but there are no plans in place to show how such a facility will be identified, constructed and paid for. What is the estimated cost of a GDF? How big will it need to be? Will it be one facility or will there be more, depending on how many nuclear power stations are built? Worryingly, the road map talks about having interim storage in the meantime. This shows that there is still no solution in place for disposing of radioactive nuclear waste, other than burying it for hundreds of years. Our current decommissioning legacy is estimated to be £124 billion, so why do we want to create another generation of nuclear waste for future generations to pay for? There is always a risk that a future Government will need to pick up the tab for decommissioning, no matter what companies sign up to at the outset.

Finally, we are told that nuclear is required because of its reliability and because it produces power when the wind does not blow and the sun does not shine. Over the last 12 years, however, each nuclear reactor has been offline for roughly a quarter of the year, so the dependability of nuclear is not a given. Indeed, Heysham and Hartlepool power stations are offline and have been since December, so two out of three in the existing fleet in England are offline. Before Hinkley comes online, seven of the original eight nuclear stations operating just a few years ago will have gone offline. If we can operate with such a depletion of the existing nuclear fleet before Hinkley comes online, that undermines the argument that we need nuclear to supply the baseload. The Government clearly do not think that the lights will go out when the rest of these nuclear stations are being decommissioned before Hinkley comes online. To me, the road map seems to be all false aspiration and not enough substance, and it flies in the face of the reality of what we know about the operation of nuclear in the past few years and how the market really sits at the moment.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 28th November 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

It would not be Energy questions without a question on Wylfa from my hon. Friend, who is such a champion for that technology and for her constituency. We all agree that Wylfa is a great candidate for new nuclear and one of several potential sites that could host new projects—[Interruption.] Ignore the luddites on the SNP Benches. As a first step towards a new national policy statement, the Government will consult later this year on a way forward to determine how new nuclear developments might be located.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

T6. In energy-rich Scotland, roughly one in three households in my constituency is living in fuel poverty. A properly designed social tariff would at least alleviate some of that poverty. Why have the Government broken their promise of a year ago to consult on a social tariff?

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

As my right hon. Friend the Secretary of State indicated earlier, a social tariff can mean different things to different people. We are consulting suppliers and many stakeholders to ensure that what we are doing is the right thing. We are also looking at flexibility around the warm home discount.

Draft Electricity Capacity (Amendment) Regulations 2023

Alan Brown Excerpts

Tuesday 18th July 2023 General Committees

[The Minister for Energy Security and Net Zero (Graham Stuart)]

I beg to move,

That the Committee has considered the draft Electricity Capacity (Amendment) Regulations 2023.

It is a great pleasure to serve under your chairmanship, Mr Robertson. The regulations were laid before the House on 12 June. The draft instrument seeks to make technical changes to the capacity market scheme, the Government’s main tool for ensuring security of supply in Great Britain.

As set out in the “Powering Up Britain” paper, which was announced in the House on 30 March, we have bold new commitments to super-charge clean energy and accelerate renewable deployment. In the shorter term, while the future geopolitical context is still uncertain, we recognise that the world is likely to face continued challenges this winter around security of supply, considering Russia’s illegal invasion of Ukraine.

What does the draft instrument do? To ensure that the capacity market continues to function effectively, we regularly make adjustments to the implementing legislation, based on our day-to-day experience of operating the scheme. In that context, the draft instrument makes changes to three electricity capacity regulations to deliver technical improvements that support the functioning of the capacity market.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Will the Minister give way?

[Graham Stuart]

I will make a little more progress first. The capacity market is now well established, with capacity auctions held every year since its inception in 2014. The draft instrument aims to reduce the administrative burden associated with the process, as we believe that it is more appropriate instead to notify the market when the intention is for an auction not to be held, rather than having to announce each year that it will be. The change will not impact the nature of participation in the scheme or announcements regarding the targets for the capacity auction. It simply seeks to change the way in which the announcement is made that confirms whether auctions will be held.

We have also been made aware that the existing transfer route that enables capacity agreements to be terminated in order to participate in the contracts for difference scheme cannot be used in practice, due to interactions between the definitions used in the regulations and the delivery timeframes. The draft instrument seeks to amend the definition of the contracts for difference transfer notice to enable the transfer route to be used. The draft instrument seeks to improve administrative arrangements by extending the timescales associated with the settlement body’s calculation of penalties and issuing of associated invoices for non-delivery.

[Alan Brown]

I thank the Minister for giving way. Paragraph 7.1 of the explanatory memorandum states that nuclear can form part of the capacity market. Will he explain how nuclear can bid in? We keep getting told that the great thing about nuclear is that it provides baseloads. How does that work in the capacity market auction?

[Graham Stuart]

As happy as I would be to engage in a wider discussion about nuclear this morning, I think it might be best if I wrote to the hon. Gentleman to set out those specific concerns.

Turning to the Government consultation, the changes in the draft instrument were consulted on at the start of the year and were broadly supported by respondents. We also consulted on a wider range of changes, including to the capacity market rules that set out the detailed provisions for the delivery of the scheme.

As was signalled in the Government response to the consultation, we intend to follow a two-phased approach to reforms to the capacity market. First, we will proceed with technical changes to strengthen the security of supply and ensure better value for money. In the second phase, we intend to undertake further analysis and development before taking a final decision on implementation.

The capacity market continues to support low-carbon technologies, with growing participation of demand-side response and storage technologies. In line with the broad support for greater alignment of the capacity market with net zero, the Government remain committed to introducing an emissions limit reduction for new build and refurbishing plants into the capacity market and exploring options to address barriers to low-carbon technologies to help drive the transition to a net zero power system by 2035, subject to security of supply. Further analysis is required to understand the impact that the proposals will have on energy security.

Through developments to the capacity market and the review of the electricity market arrangements programme, we are confident that the right market signals will be in place to ensure that we meet our 2035 decarbonisation target, subject to security of supply. As has been highlighted, we have also made a number of technical amendments to the capacity market rules, which were laid before the House on 12 July. Rule changes will be introduced to reduce administrative burdens for prospective capacity providers and clarify how auctions are operated for the benefit of participants.

In conclusion, the draft instrument introduces a number of technical provisions necessary to enable the continued efficient operation of the capacity market, so that it can continue to deliver on its objectives. I commend the regulations to the Committee.

--- Later in debate ---

[Alan Brown]

It is a pleasure to serve under your chairmanship, Mr Robertson. I can say more if the Committee really wants, but I will raise just a couple of things, and we will not oppose the draft regulations.

On how the capacity market operates overall, I think we will get to a place pretty soon where we do not rely on diesel generators, for example. Demand-side response was mentioned and that is certainly a way forward. We have to do more work on that.

I also bring to the Minister’s attention that I think we can get to a place where it is much easier for projects to bid in for the CfD auction and also to combine storage with renewable generation, so the storage aspect can bid in to the capacity market. It is about a way to drive that combined project status and get away from fossil fuel. I ask the Minister to think about that.

Energy Infrastructure

Alan Brown Excerpts

Wednesday 5th July 2023 Commons Chamber

[Stephen Crabb]

The hon. Lady makes a good point. Investment in large-scale nuclear, or even small modular reactors, is a longer-term feature of our energy system, as the Government’s “Powering up Britain” report recognised. In fact, the Government’s targets for increasing nuclear are for 2050, not 2030.

On the cost of nuclear, yes, those points were made to the Committee. We made sure that we had an evidence session to hear from Friends of the Earth and others who are opposed to nuclear per se. We heard their strong arguments about their belief in an energy system entirely comprising of renewable and power storage technology in the future, but we also heard strong evidence that the technology for that does not yet exist. We have to stay in the real world, so nuclear, which has been tried and tested over the long term as a provider of cheap and reliable power, is an important part of our future energy mix, in conjunction with other energy sources.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I was going to make a similar point to that made by the hon. Member for Brighton, Pavilion (Caroline Lucas). The right hon. Gentleman is talking about not relying on future technologies, but SMRs are future technologies—he has admitted that they use technology that does not exist at the moment. How much does he estimate one large-scale new nuclear plant will cost, and how much would a fleet of SMRs cost, if they come to fruition?

[Stephen Crabb]

I am going to disappoint the hon. Gentleman, because I do not have those specific figures in the pile of notes I have brought with me. However, those figures are out there and the evidence is there. He is right that small modular reactors are a technology for the future and testing is still required, but that work is going on, and not just in the UK but in other countries. It will be a technology for the future, so there is no point in us putting our heads in the sand and wilfully pretending otherwise. I believe it will be a technology for the future, but a lot will depend on future costs.

--- Later in debate ---

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I am sure you do not need to remind people to come and listen to me starting the wind-ups, Madam Deputy Speaker.

I commend the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), the Chair of the Welsh Affairs Committee, for opening the debate. The fact that 13 Back-Bench Members followed him shows what an important subject he picked. This is clearly the best subscribed of the estimates day debates.

For the most part, there has been consensus today. Everyone seems to understand the rate of deployment of renewable energy that we need, the number of grid upgrades required, the need to improve consent processes, the opportunities to create new green-based jobs, and the importance of training people in the right skills and of efficient workforce planning. That ties in with the just transition as well. There was also broad agreement on the benefits of floating offshore wind, and cross-party agreement about the importance of carbon capture and storage at Humber and Tayside. I shall say something about Acorn later. Four speakers were in favour of new nuclear energy, so there is a kind of consensus there, although I will shatter that consensus shortly. With one honourable exception, everyone also seems to agree that we need to get on with delivering net zero.

Let me begin by raising a point that no one else raised: post-Brexit trading arrangements for energy. Energy UK has estimated that they are adding £1 billion a year to our bills—£1 billion that could be spent better elsewhere. It could, for example, upgrade 100,000 homes a year to an energy performance certificate C rating, or it could just be taken off our bills, given the cost of living crisis. I want to know what the Government are doing to improve the energy trading arrangements to remove this £1 billion surcharge from our bills.

I said a moment ago that I would break the consensus on new nuclear energy. Although there is clear cross-party support from Labour and the Tories, we in the SNP remain opposed to it. Nuclear is the only energy technology that has become more expensive rather than cheaper over the years. On an estimates day, it is worth noting that the estimate of the cost of nuclear decommissioning has risen by a staggering £130 billion. Why do we want to build more new nuclear and increase the nuclear waste legacy? This would also require the construction of a new nuclear geodisposal site. So nuclear is expensive, and it is not the way forward. No successful European pressurised reactor project has yet been built anywhere in the world. Hinkley Point C is years behind schedule, and the costs have increased to £33 billion. I therefore do not understand the rush to enter into a new agreement to build another nuclear power station at Sizewell C, which will clearly cost between £35 billion and £40 billion—money which, again, could be much better spent elsewhere.

The strike rate for Hinkley is £92.50 per MWh, as opposed to £40 per MWh for offshore wind, but the renewable energy contracts for offshore wind are only for a 15-year period, whereas the Hinkley contract is for 35 years. The Government want to enter into a 60-year contract for Sizewell C. This is collective madness. There are also hidden subsidies. If EDF connects with the grid and starts generating electricity, it will be paid for doing so—let alone the strike rate. Scottish renewable energy projects, meanwhile, pay the highest grid connection fees in Europe. How is that equitable? There is another hidden subsidy for EDF. The strike rate of £92.50 was supposed to be reduced by £3 per MWh if the Government entered into a contract with Sizewell C, but the Government is now dropping that contract. I should like to know why they are giving that hidden subsidy to EDF, and why they are not holding it to reducing the strike rate.

The fact is that we do not need big new nuclear projects. We have heard talk of the need for nuclear when the sun does not shine and the wind does not blow, but nuclear is not always there when we need it either. Over a 10-year period, each nuclear reactor is offline for nearly 25% of the year. Even the reactors at Sizewell B, the newest nuclear station in the existing fleet, are offline for between 15% and 20% of the year. Nuclear is not the reliable baseload that we keep being told it is, and that is why we need to look at other technologies, such as pumped storage hydro and storage in general.

Another aspect of nuclear that we have heard about today is small modular reactors. As I said in an intervention, that is a future technology, although people keep talking about it as if it were already here. There is no approved regulated design for a small modular reactor yet, and if Rolls-Royce sticks to the assessment that has been made, it is not due to be completed until September next year. How can the Government launch a competition to pick a small modular reactor when there is not even a design that complies with UK regulations? That makes no sense.

The talk of small modular reactors makes them sound like small compact units. The capacity of Rolls-Royce’s small modular reactor will be 475 MW, which is nearly 50% higher than the international definition. Moreover, it will be the size of two football pitches, which is not exactly small in my book. As for the cost, it is estimated to be between £1.5 billion and £2 billion per reactor. The kicker is that Rolls-Royce wants its own contract to supply between 12 and 15 small modular reactors. What it is actually asking for is an order worth between £20 billion and £30 billion in up-front capital costs. Again, that is money that could be much better elsewhere, and there are existing technologies that could be deployed much more quickly.

That could include pumped storage hydro. I keep returning to this point, but SSE’s Coire Glas scheme in the highlands has all the consents in place. It is spending £100 million just now on up-front design works. That project could be delivered by 2031. With £1.5 billion of private capital investment, there is no Government capital subsidy needed; all that is needed is a revenue guarantee and a cap and floor mechanism. The Secretary of State said yesterday that he has been in talks with SSE, but he has not been in proper talks with SSE about developing a cap and floor mechanism. We want the Minister to take that point away today. Please will the Government listen? Up to 7 GW of pumped storage hydro could be deployed in Scotland—dispatchable energy that will be there when the wind is not blowing. It would utilise spare excess energy, taking it when it is cheaper and dispatching it when there is a need, so it is the perfect complement to renewable energy.

On carbon capture, we really need definitive timescales for track 2 clusters. As was said earlier, investors are getting nervous about the timelines. Yesterday, the Secretary of State was talking about confirming track 2 this year, whereas in the Energy Bill Committee recently, the Minister said that there would be an update this summer. We need certainty. We need to get Acorn up and running and give it the backing it needs. Acorn does not need a pipeline, and it is strategically important because it can import carbon dioxide from other clusters in the UK and store it. It should be a UK strategic site, so we really need to get it up and running.

Finally on technologies, I want to talk about tidal stream. Concerns have been raised about strike rates for AR5 with respect to wider renewables. The same pressures apply to tidal stream. We need to look at the strike rates that it is expected to achieve. We need to find the pathway to allow it to scale up. Ringfencing the pot for AR5 was welcome, but frankly £10 million is not enough. We need to be willing to commit more to support tidal stream in future.

This has been a good debate, as I say. Everybody bar one agrees about the need to hit net zero, and I think we can all see the opportunities for job creation. Going forward, we need to grab those opportunities.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

--- Later in debate ---

[Andrew Bowie]

Given the limits on time, I will not. However, I commit to meeting the hon. Lady and other Members from the Humber region—or one of my ministerial colleagues will do so—to discuss how we can move those projects forward at a pace that she would find acceptable and that would be beneficial to the Humber region.

My hon. Friend the Member for Ynys Môn (Virginia Crosbie), who is such a champion not just her constituency but for the nuclear industry in general, raised the prospect of the innovations and investment that we are taking forward and making in nuclear. I look forward to having many more conversations with her in the months and years ahead, as we get Great British Nuclear off the ground, begin our down-selection process and then move forward to further gigawatt projects later on.

The only problem with the comments made by the hon. Member for Bath (Wera Hobhouse), which were well informed, was that they were so negative. As my hon. Friend the Member for Stroud (Siobhan Baillie) pointed out, we cannot meet doom with doom—we have to be positive about the benefits to our economy, this country and the environment that will be brought by this energy revolution. I am very positive, as are this Government. For those who think that this Government are complacent, let me say that this Prime Minister and this Government created the Department for Energy Security and Net Zero, we are leading the G7 on cutting carbon emissions and we are launching new nuclear programmes, as well as investing in new technologies across the piece. This Government are not complacent: we are tackling the challenges head-on and we are growing the economy in the process of doing so.

[Alan Brown]

Will the Minister give way?

[Andrew Bowie]

I will not, sorry.

My hon. Friend the Member for Mole Valley (Sir Paul Beresford) was right to raise the prospect of fusion and the transformative impact it will have. As has been said today, and as everybody says, fusion is always seen as being 20 years away. I can inform the House that we are looking to have the first commercial fusion reactor on the grid in this country by 2040. We are absolutely leading the world in this regard. It is fascinating to go up to the Culham centre to see the developments that are taking place and the science that is happening on that site. I cannot wait to see the developments at the West Burton site in Nottinghamshire as we move towards commercialisation at scale.

We heard contributions from the hon. Member for Stockton North (Alex Cunningham), my hon. Friend the Member for Peterborough (Paul Bristow), the hon. Member for Ceredigion (Ben Lake), my hon. Friend the Member for North Devon (Selaine Saxby), the hon. Member for North West Leicestershire (Andrew Bridgen), my hon. Friends the Members for Stroud and for Great Grimsby, and the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Southampton, Test (Dr Whitehead). It has been a very positive debate overall. I am pleased to have been able to respond on behalf of the Government. I am very committed to leading the change that is required to our networks, infrastructure and national grid, and in bringing forward the new technologies. We are proud to lead the world in ending contributions to climate change, as is demonstrated through our commitments to building a new energy infrastructure on a scale never seen before in Great Britain. Our strategy supports our ambitions for green growth and jobs, and will ensure that our energy infrastructure is secure and resilient, and delivers value for money to consumers, while delivering on our net zero target.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 4th July 2023 Commons Chamber

[Mr Speaker]

I call the Scottish National party spokesman.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

On pumped storage hydro, it is as though the Secretary of State just does not get it. It increases energy resilience and would reduce the £4.2 billion balancing costs that are getting paid out at the moment. The 1.5 GW Coire Glas scheme can be delivered in seven years, and it would power 3 million homes for a 24-hour period. The Government have found £700 million for Sizewell C and they have implemented cap and floor mechanisms for interconnectors, so why is he not having proper discussions with SSE about a cap and floor mechanism?

[Grant Shapps]

The Secretary of State does in fact get it, because we support the idea of having things such as hydro power. Again, I have to say that there is a choice where taxpayers’ money is spent. It has to be done competitively in the round. To be talking merely about storage and not the generation, including nuclear power, which is a key part of this country’s energy security future, simply means that the overall view that the SNP has is unbalanced when it comes to how we power our nations.

[Alan Brown]

The Secretary of State has proved he still does not get it—he is not having proper discussions with SSE. If we move to carbon capture and storage, the Climate Change Committee’s progress report identified “risks” and “significant risks” associated with industrial clusters and carbon dioxide storage, which proves it is nonsensical to have Acorn as a reserve. When will the Government announce the track 2 clusters and provide parity for Acorn? When does he envisage Acorn starting construction? That is vital to meet the 2030 targets.

[Grant Shapps]

As the hon. Gentleman knows, we have already pumped £40 million into Acorn. It is on the reserve list. He asks when; the answer is this year for track 2 and track 1 expansion. So I say it again: the Secretary of State does get it.

Road Fuel Prices

Alan Brown Excerpts

Monday 3rd July 2023 Commons Chamber

[Mr Speaker]

I call the Scottish National party spokesperson.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The Minister says he will not stand for motorists’ being ripped off, but that is exactly what Ministers have done. The Government have been complacent the whole time, following the 5p fuel duty cut.

Why has it taken the CMA so long to establish that motorists are being gouged by 6p per litre compared with 2019? It reported that diesel prices are an astonishing 13p per litre higher this year alone than they should have been. That is symptomatic of the “cost of greed” crisis. Asda received a fine for not complying with the CMA investigation. That shows an astonishing level of arrogance on the part of supermarkets that are ripping off their own customers. It is estimated that we are paying nearly £l billion a year in additional fuel costs due to the lack of competition. How does imposing an initial fine of £30,000 on Asda work as a deterrent when it is making so much money?

I am all for an open data fuel finder scheme, but really, is that it? I already use an app to shop around for cheaper fuel prices, so this open data will not necessarily bring competition in all areas of the UK, and reliance on an app obviously will not help those who are digitally excluded. What are the Government’s actual plans to ensure competition and reduced fuel prices, especially at motorway service stations, which are between 20p to 30p per litre more expensive? When will we see these fuel prices come down?

[Graham Stuart]

That is the closest I have ever seen the hon. Gentleman come to welcoming a Government response, so I shall take that with me. I do not mean to try your patience any more than I already do, Mr Speaker, but, as I said to the hon. Member for Bristol East (Kerry McCarthy), whether it is major energy packages or shipbuilding, we find that doing the work first leads to better long-term outcomes.

Draft Electricity and Gas (Energy Company Obligation) Order 2023

Alan Brown Excerpts

Monday 3rd July 2023 General Committees

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Dowd.

I welcome the draft order. The more money we can invest in energy efficiency, the better. How could I not be drawn in by a scheme that includes “Great British” as part of its title? It is so alluring. [Laughter.] But I do welcome the investment.

I have just a few questions for the Minister. Page 4 of the impact assessment states that, overall, the UK Government have a target to reduce energy consumption by 15% by 2030, compared with a 2021 baseline. How much will the draft order and these proposals for the installation of energy efficiency measures contribute to that 15% reduction target? What is the overall plan to get that 15% reduction by 2030?

The impact assessment also states that more than 100,000 additional homes will be helped to meet the target of being upgraded to achieve an energy performance certificate rating of band C. That is welcome, but to put it in context, it will still leave another 14 million or so homes to upgrade to EPC band C. What is the long-term target for getting those other 14 million homes upgraded to EPC band C, which is critical? That is the scale of the task that lies ahead.

The impact assessment further mentions a 20% uplift allowed for tackling rural properties in Scotland and Wales. What is the derivation of that 20% uplift? How realistic is the uplift as an allowance enabling rural homes in Scotland and Wales to fall under the scheme?

The whole thrust of the scheme seems to be based on cavity wall insulation as the main measure. Is that the right strategy overall, or does it mean that we are not tackling enough homes with other measures that could lift people out of fuel poverty? That is also critical. It is not just about reducing energy usage; it is about lifting people out of fuel poverty.

Further to the comments made by the hon. Member for Southampton, Test, I also want to highlight that the Government need to look at the roll-out of ECO4+, because it is quite clear that energy companies are saying that they are not getting the number of target properties to keep the scheme operational.

Energy Bill [ Lords ] (Eighteenth sitting)

Alan Brown Excerpts

Committee stage
Thursday 29th June 2023 Public Bill Committees

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I want to say a few words in support of new clause 87. As the hon. Member for Sheffield, Hallam outlined, it is not even that onerous, as it is about reporting going forward, although I always find that clauses that require reporting still have the Government running a mile, because they do not like to commit to it.

Government Members voted to remove from the Bill clauses 272 and 273, which were in favour of community energy schemes and putting in place arrangements to procure them. The argument from the Minister was:

“Introducing a fixed price would be a step backwards, as it requires all energy consumers to pay more than the market price for electricity to subsidise local communities that benefit from community energy projects.”––[Official Report, Energy Public Bill Committee, 20 June 2023; c. 357.]

I do not think it is too onerous to ask all billpayers to help to subsidise a few community schemes. Will the Minister write to the Committee to outline what additional costs the Government think would go on to all billpayers’ bills if there was a fixed price guarantee for local energy schemes? It is really important that we understand what the Government think the extra costs would be for billpayers.

The Government happily tell us that the regulated asset base model in the Nuclear Energy (Financing) Act 2022 will add £10 to every single bill in the UK. If that is the case and it is okay for nuclear, why do they not look at what the costs and benefits overall for local community energy schemes would be? That is my main point.

Will the Minister also write to the Committee to outline the amount of community energy that has been deployed each year in the last decade? That will allow us to understand the trends and how easy it is for community energy schemes to access the grid and the system and whether there are any blockers.

Finally, perhaps the Minister does not need to write to us on this, but will he spell out what he thinks the flaws are now in the original Local Electricity Bill that he did not see at the time, when he signed up as a supporter and sponsor of the Bill? What are the defects, since he is now against such a concept?

[Andrew Bowie]

I thank hon. Members for their contributions, and especially the hon. Member for Sheffield, Hallam for tabling new clause 87, which seeks to create a new community energy strategy, to be followed up with annual reports to Parliament on progress for the sector. The Committee discussed community energy in great detail last week—and a very enjoyable debate it was too. I reassure the Committee that the Government are, as we speak, looking closely at this matter. I urge all Members to watch this space.

Nevertheless, I remind Members that the Government’s general approach to community energy is already laid out in the net zero strategy and the net zero growth plan. As such, we do not see any added value in mandating a dedicated community energy strategy or annual report in the manner set out in the new clause. Instead, we believe it is more beneficial to the community energy sector for the Government to continue our approach to help local authorities and community energy groups to work together to develop funding for projects across the net zero agenda, with funding from existing sources such as UK growth funding schemes.

For example, the UK shared prosperity fund provides £2.6 billion in funding for investment in places, including for community infrastructure projects. Ofgem supports community energy projects and welcomes applications to the industry voluntary redress scheme. Through our local net zero hubs, we are supporting local authorities and community energy groups to work together, including by funding a pilot programme that supports local authorities to develop community-led energy groups and projects.

The Government have also reintroduced the community energy contact group to strengthen our engagement with the sector. I have already outlined our arguments as to why the new clause would not be fair, so I am afraid that I cannot commit to writing to the Committee, as the hon. Member for Kilmarnock and Loudoun asks me to. In relation to why my own personal position may be now what it is, I have always been, and remain, committed to supporting community-led energy groups across the country. That is why we are working to implement schemes to support those projects across the entire UK. We will continue to do so, and I will be their biggest champion.

[Alan Brown]

It was positive to hear the Minister say, “Watch this space” because the Government are reviewing things. However, I reiterate my request that he writes to the Committee to outline what he thinks the costs will be. That must be a Government concern if they are considering how to provide further support to community energy schemes. That is a serious request—I am not trying to be awkward. Also, how much community energy is being deployed each year?

[Andrew Bowie]

I would be delighted to engage in further discussion with the hon. Gentleman and other interested hon. Members. I will commit to ongoing engagement, but we do not believe that the new clause provides any added value.

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[Dr Whitehead]

I have no further comments to make, other than to thank the Minister for his comments. There are indeed consultations under way through Ofgem, and I look forward to seeing what those have to say. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 90

Objections by planning authorities to applications for consent under section 36 or 37 of the Electricity Act 1989

“(1) Schedule 8 to the Electricity Act 1989 is amended as follows.

(2) Omit paragraph 2.

(3) In the cross-heading before paragraph 3, omit ‘by other persons’.

(4) In paragraph 3, omit sub-sub-paragraph (2)(a).”—(Alan Brown.)

This new clause would remove the ability of a local planning authority automatically to cause a public inquiry to be held by objecting to an application to the Secretary of State for consent under section 36 or 37 of the Electricity Act 1989, instead leaving Ministers to decide whether a public inquiry should be held.

Brought up, and read the First time.

[Alan Brown]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss new clause 91—Variations of consents under section 37 of the Electricity Act 1989—

“(1) The Electricity Act 1989 is amended as follows.

(2) After section 37, insert—

‘37A Variation of consents under section 37

(1) The person for the time being entitled to the benefit of a section 37 consent may make an application to the Secretary of State for the consent to be varied.

(2) Regulations made by the Secretary of State may make provision about the variation of a section 37 consent, including in particular provision about—

(a) the making and withdrawal of applications;

(b) fees;

(c) publicity and consultation requirements;

(d) rights to make representations;

(e) public inquiries;

(f) consideration of applications.

(3) Regulations under subsection (2) may provide for any statutory provision applicable to the grant of a section 37 consent to apply with specified modifications to the variation of a section 37 consent.

(4) On an application for a section 37 consent to be varied, the appropriate authority may make such variations to the consent as appear to the authority to be appropriate, having regard (in particular) to—

(a) the applicant's reasons for seeking the variation;

(b) the variations proposed;

(c) any objections made to the proposed variations, the views of consultees and the outcome of any public inquiry.

(5) Regulations may make provision treating, for prescribed purposes, a section 37 consent varied under this section as granted in its varied form when the original consent was granted (rather than when the variation was made).

(7) In this section—

“section 37 consent” means a consent granted under section 37 (consent required for overhead lines), whenever granted;

“statutory provision” means a provision of or made under an Act, whenever passed or made; and for this purpose “Act” includes an Act of the Scottish Parliament and an Act of the Assembly.’”

This new clause would introduce into the Electricity Act 1989 provision for applications to vary consents under section 37 (consent required for overhead power lines), which currently, unlike consents under section 36 (construction, extension or operation of generating station), require a new application to be made for consent.

[Alan Brown]

The Committee must have been delighted that I managed to table two new clauses right at the deadline. Hopefully I will not detain the Committee too long.

These two new clauses derive from liaison and discussions that I had with Scottish and Southern Electricity Networks, which is responsible for the transmission system in the north of Scotland. Its work and infrastructure are clearly going to be integral to having a system that gets renewable energy from the north of Scotland to elsewhere in Great Britain and, in the case of surplus energy, to Ireland and Europe for export. The Minister is obviously well aware of that, given that it relates to his constituency, but hopefully he is also aware of the need to have a streamlined process that facilitates the deployment of critical grid infrastructure and has thought about the issues that the new clauses cover.

Taking offshore wind in the round, there is a target of 50 GW of deployment by 2030, although it has to be said that that was set largely on a whim by Boris Johnson, who raised the target from 30 GW, to 40 GW and then suddenly to 50 GW. Now, I am all for that ambition and that target, and if we achieve the deployment of 50 GW of offshore wind energy by 2030, that would be fantastic, but we need the policies and support in place to make that happen. Right now, even the Government’s own offshore wind champion, Tim Pick, says we are not going to hit that 50 GW target. So is the offshore wind champion still a champion who knows his stuff, or will the Minister explain why Tim Pick is wrong and why that 50 GW target will be achieved by 2030?

Tim Pick said that there is more likely to be 40 GW of deployment by 2030, which arguably would still be a significant achievement, but it would represent only 80% of the current target. The reality is that we have 14 GW of offshore wind deployed at the moment, so if we are to hit 50 GW by 2030, we need 5 GW of new offshore wind to come onstream every year until 2030.

--- Later in debate ---

[Andrew Bowie]

I thank the hon. Gentleman for his contributions on the new clauses. I have said in Committee, on the Floor of the House and elsewhere that this is the biggest challenge we face—connectivity and improving capacity in the grid—if we are to reach our targets, not just on our net zero commitments but in becoming more energy secure and delivering cheaper bills for the British people.

I recognise that the speed of electricity consenting in Scotland is critical to those aims and to the whole UK economy, as I have just suggested. It is important to enable rapid deployment of renewable energy generation and of the transmission lines needed to transport it to consumers across the country. With that goal in mind, we are aware that areas of the Scottish planning system need to be reviewed—specifically the ones that the hon. Member for Kilmarnock and Loudoun just mentioned—and we are committed to speeding up planning decisions across the UK wherever possible.

I am sure, however, that we are all in agreement—I know the hon. Gentleman is—that the issues are incredibly complex and multifaceted, and that any potential changes need to be carefully considered to ensure they are the right ones for consumers and the network. For example, as the Electricity Act 1989 applies to projects in England and Wales less than 132 kV and 2 km, and to all transmission projects in Scotland, we need to be certain that any amendments to the Bill would not have unintended consequences elsewhere. Moreover, we would not want to remove an automatic inquiry trigger without understanding what could replace that process.

The Government share the concerns of the hon. Member for Kilmarnock and Loudoun and we want to find a solution. I have had constructive discussion with the Energy Minister in the Scottish Government and within my Department on how to resolve this issue moving forward, but I am interested to meet the hon. Gentleman and anyone else he might suggest so that we can work together on a solution to this complicated issue. I therefore do not feel that we can accept his new clauses, and I would be grateful if he did not press them to a vote.

[Alan Brown]

I was shocked when the Minister said that he could not accept the new clauses—I did not see that coming! I am having to think on my feet, because I am completely thrown.

To make a serious point, I appreciate the Minister’s offer of a meeting, and I would like to take that up. I suggest that we have someone from the industry there as well. I am happy to work with the Minister to see how we can resolve the matter. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Schedule 1

Permitted disclosures of material obtained by OGA

“Disclosure by OGA to specified persons

1 (1) Section (Prohibition on disclosure) does not prohibit a disclosure of protected material by the OGA which—

(a) is made to a person mentioned in column 1 of the table below,

(b) is made for the purpose of facilitating the carrying out of that person’s functions, and

(c) is a disclosure of protected material obtained by the OGA under a provision mentioned in the corresponding entry of column 2 of the table.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 114, in clause 275, page 242, line 31, at end insert—

“(10A) The Secretary of State may not make regulations under this Act which would affect any matter within the competence of the Scottish Parliament unless the Secretary of State has first—

(a) consulted the Scottish Ministers on a draft of the regulations; and

(b) obtained the consent of the Scottish Parliament to the regulations.”

Clauses 275 to 277 stand part.

Government amendments 171, 172, 123, 133, 131 and 175.

Clause 278 stand part.

Government amendment 17.

Clause 279 stand part.

--- Later in debate ---

[Dr Whitehead]

I also have a 3,000-word speech, but I will not give it today. The Government amendments and clauses are wholly unexceptional, and are essential for the speed of the Bill. I have nothing further to add to what the Minister said.

[Alan Brown]

I will be brief. Amendment 114 is about getting the consent of Scottish Ministers before the passing of regulations. I could have tabled it to any number of previous clauses, but this is the most appropriate clause for it to relate to, because it relates to the regulations made under the whole Bill.

There has been talk of collegiate working—the two Governments working together—and the Minister said that he wants to find a different process, but there remain concerns that unless there is a firmed-up process, there is a risk that, somewhere down the line, policies and regulations will be proposed against the consent of Scottish Ministers.

The Scottish Government support the Bill; we are working together in these policy areas. It is not about trying to give the Scottish Government some sort of veto but about working together and ensuring that processes are in place that allow for not just consultation but taking the advice and wishes of the Scottish Government on board.

I know that the word “consent” always makes the Westminster Government very nervous, because they think it gives too much power to the Scottish Parliament, but it is not about that. It is not about political fights; it is about working together and ensuring that the wishes of the Scottish Government in respect of energy matters and considerations are taken on board.

--- Later in debate ---

[Alan Brown]

I do not think it would be an unnecessary legislative burden, to be honest. If it is some simple process, consent will be equally simple to achieve, so I do not think it would unduly delay things or overcomplicate them. I will not press amendment 114, but I reserve the right to table it on Report, because I really want to ensure that things are resolved to the satisfaction of each side.

Question put and agreed to.

Clause 274 accordingly ordered to stand part of the Bill.

Clause 275

Regulations

Amendment made: 19, in clause 275, page 241, line 35, after “State” insert “, the Treasury”.—(Andrew Bowie.)

This amendment provides for regulations made by the Treasury to be made by statutory instrument. This will affect regulations under paragraph 9 of Schedule 7.

Clause 275, as amended, ordered to stand part of the Bill.

Clauses 276 ordered to stand part of the Bill.

Clause 277

Extent

Amendments made: 168, in clause 277, page 243, line 6, at end insert

“, except section (Power to modify Gas Act 1986 in relation to hydrogen)”.

This amendment is consequential on Amendment 170.

Amendment 169, in clause 277, page 243, line 16, at end insert—

“(aa) sections (Key definitions for Part), (Designation), (Designation: procedure), (Revocation of designation), (Grant, extension or restriction of gas transporter licence by Secretary of State), (Applications for grant etc of gas transporter licence), (Modification of gas transporter licence by Secretary of State), (Scope of modification powers under section (Modification of gas transporter licence by Secretary of State)), (Procedure etc relating to modifications under section (Modification of gas transporter licence by Secretary of State)), (Information and advice), (Conditions of gas transporter licences for conveyance of hydrogen), (Secretary of State directions to the GEMA) and (Repeal of Part);”.

This amendment provides for the new clauses that are intended to form a new Part inserted after Part 2 to extend to England and Wales and Scotland.

Amendment 170, in clause 277, page 243, line 17, at end insert—

“(ba) section (Power to modify Gas Act 1986 in relation to hydrogen);”.

This amendment provides for NC72 to extend to England and Wales and Scotland.

Amendment 174, in clause 277, page 243, line 22, at end insert—

“(h) sections (Great British Nuclear), (Crown status), (Great British Nuclear’s objects), (Financial assistance), (Secretary of State directions and guidance), (Annual report), (Annual accounts), (Transfer schemes), (Transfer schemes: compensation), (Transfer schemes: taxation), (Transfer schemes: provision of information or assistance), (Reimbursement and compensation in connection with designation) and (Pension arrangements in connection with Great British Nuclear);”.—(Andrew Bowie.)

This amendment means that the new clauses relating to Great British Nuclear extend to England and Wales and Scotland.

Clause 277, as amended, ordered to stand part of the Bill.

Clause 278

Commencement

Amendments made: 171, in clause 278, page 244, line 7, at end insert—

“(ba) sections (Key definitions for Part), (Designation), (Designation: procedure), (Revocation of designation), (Grant, extension or restriction of gas transporter licence by Secretary of State), (Applications for grant etc of gas transporter licence), (Modification of gas transporter licence by Secretary of State), (Scope of modification powers under section (Modification of gas transporter licence by Secretary of State)), (Procedure etc relating to modifications under section (Modification of gas transporter licence by Secretary of State)), (Information and advice), (Conditions of gas transporter licences for conveyance of hydrogen), (Secretary of State directions to the GEMA) and (Repeal of Part);”.

This amendment provides for the new clauses that are intended to form a new Part, to be inserted after Part 2, to come into force two months after Royal Assent.

Amendment 172, in clause 278, page 244, line 9, at end insert—

“(ea) section (Power to modify Gas Act 1986 in relation to hydrogen);”.

This amendment provides for NC72 to come into force two months after Royal Assent.

Amendment 123, in clause 278, page 244, line 10, at end insert—

“(ea) section (Principal objectives of Secretary of State and GEMA);”.

This amendment provides for NC52 to come into force two months after Royal Assent.

Amendment 133, in clause 278, page 244, line 12, at end insert—

“(ga) sections (Electricity support payments for energy-intensive industries) and (Levy to fund electricity support payments);”.

This amendment provides for NC53 and NC54 to come into force two months after Royal Assent.

Amendment 131, in clause 278, page 244, line 16, at end insert—

“(l) section (Convention on Supplementary Compensation for Nuclear Damage: implementation power).”.

This amendment provides for NC55 to come into force 2 months after Royal Assent.

Amendment 175, in clause 278, page 244, line 16, at end insert—

“(l) sections (Great British Nuclear), (Crown status), (Great British Nuclear’s objects), (Financial assistance), (Secretary of State directions and guidance), (Annual report), (Annual accounts), (Transfer schemes), (Transfer schemes: compensation), (Transfer schemes: taxation), (Transfer schemes: provision of information or assistance), (Reimbursement and compensation in connection with designation) and (Pension arrangements in connection with Great British Nuclear);”.—(Andrew Bowie.)

This amendment means that the new clauses relating to Great British Nuclear come into force 2 months after Royal Assent.

Clause 278, as amended, ordered to stand part of the Bill.

Clause 279

Short title

Amendment made: 17, in clause 279, page 244, line 29, leave out subsection (2).—(Andrew Bowie.)

This amendment removes the privilege amendment inserted by the Lords.

Clause 279, as amended, ordered to stand part of the Bill.

Title

[Andrew Bowie]

I beg to move amendment 11, in title, line 3, leave out “industrial”.

This amendment is consequential on Amendment 10.

--- Later in debate ---

[The Chair]

Not yet—in a few minutes. I call Alan Brown.

[Alan Brown]

Thank you, Mr Sharma. I echo the thanks to you as Chair, and to the other three Chairs. Special thanks go to the Clerks, particularly those in the Public Bill Office. It is amazing how what I think is a simple, two-line email request becomes a full page of amendments. I thank them particularly for helping me to get new clauses 90 and 91 sorted on Monday. That diligence is appreciated, although apparently not by all Government Members.

I thank the Doorkeepers. It is a remarkable skill to have the patience to sit here in these Committees and listen to the often dry debate. I find that listening to politicians is quite tedious at times—[Hon. Members: “No!”] Okay, but it is a special skill, so thanks to the Doorkeepers.

The Bill has been welcomed on a cross-party basis. As the shadow Minister said, from our perspective there are still some outstanding issues, which hopefully we can iron out on Report. Let us get going.

Question put and agreed to.

Bill, as amended, accordingly to be reported.